Seller Nightmare… What If Your Home Doesn’t Appraise?
Seller nightmares hinge on a few key issues… The most common tremors are over home inspections, home owner docs, and appraisals. Once these hurdles are crossed, sleep becomes a little easier. For today, let’s address one of the biggest issues…
What if your home doesn’t appraise for the sales price?
This is a common issue in the Northern VA market where prices are constantly changing and appraisers are often very conservative with their values. If this does happen you have a few options according to the contract…
What are your options?
A. You can choose to lower your homes sales price to the appraised value. This may mean bringing money to the table or simply walking away with less.
B. You can re-negotiate with the purchaser so that they help make up the difference. For example, your home appraisers for 10K less than agreed upon in the contract. You have the buyer pay 5k extra out of pocket and you lower the price 5k.
C. You and the purchaser decide that you cannot come to an agreement and decide to cancel the contract. This is common if the buyer has no money to bring to the table and you cannot afford less than the agreed upon value. Remember, the lender will not give the buyer more than the home appraises for!
Anything Else???
If you are lucky, and can find that the appraiser had no clue what they were doing during the appraisal, it is sometimes possible to dispute it. This is harder with today’s lending rules. If the buyer has an FHA loan the bad appraisal will stay with the home for 6 months no matter the value! Your best chance, if all else fails is to offer the buyer to pay for their 2nd appraisal. This could be a waste of time unless the lender is okay with it and it is a conventional loan.
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This is the lastest that we in the business have to contend. New rules to protect the consumer as always make life more difficult for everyone involved.
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